Mental Health Advocates Slam Michigan Department's Call For New System Management

Michigan Advance

September 18, 2025

Opposition to the Michigan Department of Health and Human Services’ request for proposals to rebid contracts for the state’s prepaid inpatient health plan providers continues to grow, and on Wednesday, a group of service providers and health advocates again warned that the move would lead to the privatization of public mental health services.

The department in August put out the call for proposals from nonprofit organizations to manage the state’s behavioral health services, drawing criticism from recipients of those services as well as providers and mental health advocates who say they’d been left out of the decision.

The state’s current system is made up of 10 regional administrative entities known as prepaid inpatient health plans, which manage Medicaid funding for mental health in the region, and also deliver Medicaid-covered services with providers throughout the state.

Lynn Sutfin, a spokesperson for the state health department, told Michigan Advance in an email that the request for proposals was issued to reflect “significant structural changes designed to improve service quality, increase accountability and enhance administrative efficiency across the system.”

The proposal was developed with “extensive feedback collected from Medicaid beneficiaries, family members, advocacy organizations, community-based groups and other stakeholders,” Sutfin said. The fragmentation of the plans, service inconsistency and a lack of accountability have been cited as common issues within the current system.

“The competitive bidding process is designed to address these concerns by creating a more unified, transparent and balanced behavioral health system,” Sutfin said.

However, Macomb County Commissioner Antoinette Wallace, told reporters at a press conference that the department’s proposal would shift oversight for 90% of the funding for public mental health services from county-based entities, to private agencies with no accountability to the public.

While similar efforts have been tried in other states, Wallace, who is also the upcoming president of the Michigan Association of Counties, said that shift led to a loss of providers, increases in bureaucracy and higher costs without improvements in care.

“A strength of Michigan’s mental health services is this public and community oversight and participation,” Wallace said. “Yet just a few blocks down here in their office towers in Lansing, the leadership of [the department] somehow has determined this system is not only insufficient, but is best improved by putting unaccountable private firms in charge.”

Former U.S. Sen. Debbie Stabenow (D-Lansing), a longtime champion for mental health services in the state, also criticized the proposed shift.

“We’re talking about a proposal that would replace a managed care system that is transparent and cost about 2% for a private managed system that is not transparent and will cost more like 15% tell me about the math on that one, resulting in $500 million in additional [overhead] costs,” Stabenow said.

What’s more concerning, Stabenow said, is layering a shift to a private system with Medicaid cuts approved by Republicans in Congress. She argued those cuts will pull the rug out from tens of thousands of Michiganders in recovery.

Approximately 300,000 Michigan residents rely on the state’s behavioral health care system according to department data. This includes adults with serious mental illness, individuals with substance use disorder and people with intellectual and developmental disabilities.

Having these services available ensures individuals can receive care, as opposed to ending up in the emergency room or jail, Stabenow said.

Rather than looking toward privatization, Stabenow said the state should look at providing more inpatient psychiatric beds for individuals who are severely ill, addressing gaps in the state’s behavioral health workforce and filling funding gaps for community behavioral health clinics.

Kevin Fischer, the executive director of the National Alliance on Mental Illness Michigan, said an overwhelming majority of Michiganders who receive behavioral health services do not want them managed by a private entity.

If management for behavioral health services moves to a private model, Fischer said they are concerned that individuals would no longer receive whole-person care that goes beyond medication and therapy and includes community supports.

“The people who receive services understand the value of that whole person care. Private entities don’t value, and frankly don’t understand, that whole person care. That’s what we have to fight for,” Fischer said.

The presser occurred during the annual Walk a Mile in My Shoes rally, which for the last two decades has given people with mental illness, substance use disorders, or intellectual or developmental disabilities a chance to share their stories and raise awareness.

MI Care Council, a statewide group representing health care providers in Michigan, said Tuesday that it disagreed with the press conference’s injection of politics into a people-focused event.

“The Walk a Mile Rally is supposed to be about the people who want their voices heard, who want to end stigma, and who want to make sure behavioral care is accessible and prioritized in every community,” said Daniel Cherrin, executive director of the MI Care Council, in a statement. “And the people attending the rally, who want legislators to understand what it’s like to walk a mile in their shoes, should not be used to advance a political agenda they are not there to advance.”

Cherrin said that while advocacy in all forms should be supported, the rally was being “overshadowed by fear-based messages about privatization.”

“The state has made it clear: only nonprofits, public bodies, and universities are eligible to submit a bid,” Cherrin said. “This event should be about dignity, inclusion, and awareness. The people who walk each year deserve to know that their voices are being lifted for who they are, not used as part of someone else’s fight. We believe in a system that works better for families and providers alike, and we are committed to building it together.”

The Michigan Advance, a hard-hitting, nonprofit news site, covers politics and policy across the state of Michigan through in-depth stories, blog posts, and social media updates, as well as top-notch progressive commentary. The Advance is part of States Newsroom, a national 501(c)(3) nonprofit supported by grants and a coalition of donors and readers.